After President Donald Trump’s marked his first 100 days in office, exchange traded fund investors quickly reacted to the new paradigm, shifting assets to best capitalize on the administration’s goals and policies.
According to a TD Ameritrade note on ETF asset flows in its platform, ETFs immediately experienced asset flows after the election, and the brokerage saw overall positive net inflows into ETFs every month since the November election, with Millennial investors leading the charge.
However, while still positive, the pace of inflows weakened in April to its slowest pace since the election as investors weighed on an extended bull market conditions and Trump’s ability to implement his promised policy changes.
As investors considered investment options under Trump, a few sectors stood out among the asset inflows, including financials, defensives, industrials and energy.
Financial sector ETFs on the TD Ameritrade platform saw the greatest net flows as a percent of asset under management immediately following the election, but the positive momentum diminished each month and even turned negative in April with outflow money being repurposed into other areas of opportunities, like defensives and industrials. Millennial investors comprised the largest group to lead this trend.
As post-election winners fell off, defensives experienced greater inflows, turning out positive net flows in April after a sharp post-election dip.
Industrials also attracted heavy inflows in the quarter ended March as Millennials focused on the sector. However, the momentum waned among older age groups as the quarter extended, with Boomers becoming net sellers in March. Nevertheless, in April, investors turned back toward the sector, largely targeting aerospace & defense ETFs, which may be a response to the heightened global military tensions and greater U.S. action.
Lastly, while crude oil and energy slipped this year, the energy sector still attracted positive net flows each month as investors may have looked at falling prices as a cheap entry point. Energy and petroleum names were particularly popular among Millennial investors. Inflows into energy ETFs, though, turned negative for April.
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